Exchange in the United States went through the worst day of 2020 because of fears of duties recession
Wall Street indicators fell on Thursday, ending with the largest one-day percentage losses in years, as the huge duties of US President Donald Trump have ignited fears of universal trade war and a global economic recession.
Magic companies lost over 1 trillion. dollars from your market valuation. From this group (Microsoft, Amazon, Meta Platforms, Alphabet, Nvidia, Tesla and Apple), the iPhone manufacturer ended with 9.25% depreciation and Meta and Amazon by almost 9%.
Investors have approached the idea that there are finally the clarity of what duties has in mind, Trump has and are engaged in adjustments and adaptation in the hope of taking a few days, and within 3 months a decrease in taxes and deregulations that have been promised to them in the election campaign will begin.
Then Trump confirmed the thesis of those who think that this is not the end and in fact the rates will be temporary because they are used for pressure. He said he could also add the pharmaceutical sector to the high duties, but that the United States is already « behind the wheel » of the situation and « is open to duties negotiations as long as other countries offer him something phenomenal. » Minutes earlier, his economic adviser Peter Navarro said that there would be no negotiations, the announced was apparent and the president would not back down.
- It was the worst for investors in corporate shares session since June 2020, and in energy – since 2022, American debt papers of all categories have been impaired by about 4%. The euro rose 1.65% to the dollar. The S&P 500 Index came down by 4.20%, DJI – by almost 4%, NASDAQ – by almost 6%. There were also downturns from London to Milan, but within 1.55-3.6%.
- There were impressive crashes in the retail sales sector. RH (former restoration hardware for furniture and furniture) has lost 40% of its market value for a day. VF Corporation (a giant in sports and free time like Timberland and The North Face) cost almost 29% cheaper than at the beginning of the stock day. GAP and luxury fashion holding Capri lost 20-24%.
- The same thing happened with Nike and Ralph Lauren because the new duties hit their major production centers, including Vietnam, Indonesia and China.
- Large banks such as Citigroup and Bank of America, which are sensitive to economic risks, have fallen, as well as JPMorgan Chase & Co.
- Exxon Mobil and Chevron decreased as raw oil prices collapsed by 6.8% due to duties and OPEC+, where they accelerated the yield increase.
Investors escaped at-risk assets, looking for security of government bonds after Trump imposed a 10% duties on most imported goods from the US and much higher taxes for dozens of other countries.
The duties, ready to break the global trade order, emphasize a sudden change compared to the situation just a few months ago, when the promise of business favorable policies at the Trump administration launched US shares to record high levels.
Investors have sold positions in the new economic reality with concerns about how other countries will respond to Trump’s statement about the White House Rose Garden the previous day.
China has promised retaliatory measures, as well as the European Union, which faces a 20% duty. South Korea, Mexico, India and several other trading partners have said they will withstand so far, as they are looking for discounts before the targets will come into force on April 9.
The next days are expected to be unstable as events develop and the full effect of Trump’s economic actions is beginning to spread to the wider economy.
| « There are still many more questions than answers here, » said Stephen Deanctis, a strategist for small and average capitalization in Jefferies Financial Group. |
US shares have lost positions since Trump took office in January, with the S&P 500 and Nasdaq falling 10% of the record peaks last month, noting correction as investors evaluated the economic damage from customs duties.
Traders are intensifying the expectations of the Federal Reserve to reduce interest rates four times this year, starting with a quarter point reduction in June. « Fed really has a considerable fire power to help the market, » said George Borz, a major investment strategist for the fixed income team at Allpring Global Investments.
This increases the importance of Friday’s salaries and speech of Fed President Jerem Powell the same day, which can offer a decisive idea of the health of the US economy and the future interest rate of interest rates.
